Pension Board members wary of Rockford's funding plan

Sean F. Driscoll

Monday

Dec 27, 2010 at 12:01 AMDec 27, 2010 at 9:40 AM

ROCKFORD — Members of the city’s Police Pension Board are skeptical of the city’s plan to shift $1.5 million from the police and fire pension funds to bolster the city’s general fund budget — largely because the bill authorizing the move hasn’t been signed into law just yet.

ROCKFORD — Members of the city’s Police Pension Board are skeptical of the city’s plan to shift $1.5 million from the police and fire pension funds to bolster the city’s general fund budget — largely because the bill authorizing the move hasn’t been signed into law just yet.

The most recent round of state pension reform, which altered Illinois’ police and fire pension systems, includes a new path for municipalities to achieve full pension funding. The current law calls for municipalities to reach 100 percent pension funding by 2033; the new law would require 90 percent funding by 2040.

The change, in theory, would allow cities to lessen their contributions now because their target funding date is seven years later and reduced by 10 percent. That’s what Rockford is trying to do to help close its 2011 budget shortfall.

Although the law passed the House and Senate by veto-proof majorities, it’s still sitting on Gov. Pat Quinn’s desk. Chicago politicians are objecting loud and hard, which could derail the process. That’s giving Pension Board members pause, because Rockford is changing its funding based on a bill that’s not law yet.

“They’re taking an aggressive position on not funding the plans at the old levels at this time,” Police Pension Board member Marcia Mueller said at a Dec. 16 pension board meeting. “They keep pushing this debt to the future.”

City Legal Director Patrick Hayes recently pitched the city’s plan to the Police Pension Board and found a dubious audience for the changes. Although Hayes doesn’t need the board’s approval — aldermen approved a change in the pension tax levies at last week’s City Council meeting — he needs their blessing. The Police Pension Board as well as the Fire Pension Board have standing to sue the city over its pension contributions.

Hayes acknowledged that the council is acting before the bill becomes law, but he said they have to move quickly because changes in the city’s tax levy must be to the county treasurer by Tuesday. The change won’t raise taxes but will shift money that would go to the pension funds to the general fund instead. City officials will use the $1.5 million to avoid layoffs in the Police Department.

Hayes didn’t appear before the Fire Pension Board, which met Dec. 15. Board President Jim Strey said it didn’t come up at the meeting, but he didn’t think the board members would have a problem with the city’s plan.

“I think the board understands the critical situation the city’s in,” he said. “This is in response to the pension legislation, which we understand allows this (change) with no grief from the state. I don’t see any issues arising on our side.”